Looming Constitutional Crisis Threatens Stock Markets

The stock markets are nervously lower, but holding steady after tanking hard midday when Goreis campaign chairman, William Daley, made it clear Goreis camp is going to challenge the legitimacy of the election process in Florida if they donit win todayis vote recount. The stock markets tanked almost instantly as Mr.Daley was speaking, only to regain much of that loss by dayis end.

"Serious and substantial," thatis how Democratic party officials described the "irregularities" in the Florida vote. As the vote recount escalates into a full fledge stalemate, neither side is willing to concede defeat without a protracted legal battle.

Mr. Daleyis demand for a recount by hand and threat of a protracted scuffle sent the Dow plummeting across the board by over 282 points and the Nasdaq off by 144. Since nothing quite like the election stalemate has ever happened before in US history the level of novelty makes forecasting the outcome difficult.

Add another E to the marketsi worries. Until the presidential stalemate all Wall Street had to worry about was the Economy, Earnings, Energy prices and the weak Euro, now we can add the Election too.

Appleis stock gained 1/8 to close at 20 3/16 on volume of 8.4 million shares. It was a roller coaster ride today for AAPL investors as the stock dropped to 19 1/16 before come back into the black.

The Nasdaq shed 31 points (-0.97%) to close at 3200 on volume of 1.88 billion shares. Importantly, the Nasdaq held above 3,000 during the midday panic selling due to the election crisis. The networking stocks actually ended higher today.

The Dow lost 73 points (-0.67%) to close at 10833 on volume of 1.1 million shares.

"Mr. Gerstner tweaked analysts at the conference, noting that 18 months ago, in a widely derided statement, "I told you the startups were fireflies before the storm," Now he said, the dot-coms are "dot-toast." He added "there is no New Economy." The business wars continue among the same companies, said Mr. Gerstner, but the addition of the Internet is the equivalent of the invention of gunpowder. IBMis traditional customers are using the Internet to beat their competitors, he said."

Dell lost 1 15/16 to 28 3/8. The company reported third quarter earnings of $0.25 per share as expected. Revenues were $8.3 billion , thatis up 22% from the $6.78 billion a year earlier and $630 million better than the $7.67 billion in the second quarter. However, before Dell warned early in October, analysts had forecast $8.5 billion is revenues. Earlier in the day a Bank America analyst accused Dell of "stuffing the channel," according to CNBC. (How do you stuff the channel if you donit have retail outlets?)

Compaq fell 2.24 to 27.11. Shares of Microsoft gained 1 7/16 to 7/8. Gateway was lower by 1.80 to 46.20.

In economic new: The producer price index, a measure of inflation at the wholesale level, climbed 0.4% October, but the core PPI, which excludes the volatile energy and food categories, fell by -0.1%. A falling core PPI is deflationary and a sign that the slowing economy is sapping the pricing power of retail businesses. Todayis PPI was augmented by anecdotal evidence from Disney (DIS) and the News Corporation (NWS) both of which reported falling advertising revenue in the last quarter.

For full quotes on all the companies mentioned in this article, we have assembled this set of quotes at Yahoo! for your reference. For other stories regarding Appleis stock activity, visit our updated Apple Stock Watch Special Report.